CBIC Imposes Safeguard Duty on Steel Imports: Key Details and Implications

The Ministry of Finance, Department of Revenue, has issued a significant notification (No. 02/2025-Customs (SG)) on December 30, 2025, concerning the imposition of safeguard duties on the import of specific steel products into India. This blog aims to provide a detailed overview of the notification, its implications, and the key points that stakeholders need to be aware of.

Background of the Notification

The notification addresses the import of “Non-Alloy and Alloy Steel Flat Products,” which include:

Hot Rolled Coils, Sheets, and Plates
Hot Rolled Plate Mill Plates
Cold Rolled Coils and Sheets
Metallic Coated Steel Coils and Sheets (including Galvanneal, Zinc, Aluminium-Zinc, Zinc-Aluminium-Magnesium coated products)
Colour Coated Coils and Sheets

These products fall under tariff headings 7208, 7209, 7210, 7211, 7212, 7225, and 7226 of the First Schedule to the Customs Tariff Act, 1975.

The Director General (Trade Remedies) conducted an investigation and found that a recent, sudden, sharp, and significant increase in imports of these goods has caused and threatens to cause serious injury to domestic producers. As a result, the Central Government has decided to impose safeguard duties to protect the domestic industry.

Key Details of the Safeguard Duty

The safeguard duty has been imposed under sub-section (1) of section 8B of the Customs Tariff Act, 1975, and the Customs Tariff (Identification and Assessment of Safeguard Measures) Rules, 1997. The duty rates are as follows:

12% ad valorem: Applicable for imports from April 21, 2025, to April 20, 2026.
11.5% ad valorem: Applicable for imports from April 21, 2026, to April 20, 2027.
11% ad valorem: Applicable for imports from April 21, 2027, to April 20, 2028.

Important Note: The safeguard duty will not be levied for the period between the lapse of the provisional safeguard duty and the publication of this notification.

Exemptions from Safeguard Duty

The notification specifies certain exemptions from the safeguard duty:

Import Price Threshold: The safeguard duty will not apply to specific product categories if imported at or above the following CIF-based import prices:
- Hot Rolled Coils, Sheets, and Plates: USD 675 per MT
- Hot Rolled Plate Mill Plates: USD 695 per MT
- Cold Rolled Coils and Sheets: USD 824 per MT
- Metallic Coated Steel Coils and Sheets: USD 861 per MT
- Colour Coated Coils and Sheets: USD 964 per MT
Exemptions for Developing Countries: Imports from certain developing countries listed in Notification No. 19/2016-Customs (N.T.) are exempt from safeguard duties, except for specific countries such as China PR, Vietnam, and Nepal, depending on the product category.
Excluded Products: The following products are excluded from the scope of the safeguard duty:
- Cold Rolled Grain Oriented Electrical Steel (CRGO)
- Cold Rolled Non-Oriented Electrical Steel (CRNO) coils and sheets
- Coated – Electro Galvanized Steel
- Tinplate
- Stainless steel
- Nickel Coated / Nickel Plated Cold Rolled Steel
- Rubber Coated Steel
- Electro Galvanised (EG) – Zinc Nickel Coated Steel
- Bi-Metal Steel / Bi-Metal Sandwich Steel
- Brass Coated Steel Wire
- CRUTONITE
- INCONEL
- Stainless Steel Items
- Aluminium Coated Steel
- Aluminium Silicon Coated / Hot Dipped Aluminised Silicon Coated Steel
- Hot Rolled Clad Steel Plate
- Nickel Plated Steel / Nickel Plated Strip
- Copper Plated Steel
- Laminated Electro Galvanized (EGI)
- Cobalt Plated Steel
- Silver Plated Steel
- Titanium Clad Plates

Key Definitions

The notification provides clarity on certain terms:

CIF Basis Import Price: Refers to the assessable value determined under Section 14 of the Customs Act, 1962.
Rate of Exchange: The applicable exchange rate for calculating safeguard duty will be as specified in the Government of India’s notifications under Section 14 of the Customs Act, 1962. The relevant date for determining the rate of exchange is the date of presentation of the bill of entry under Section 46 of the Customs Act.

Implications of the Notification

Protection for Domestic Industry: The safeguard duty aims to protect Indian steel manufacturers from the adverse effects of increased imports, ensuring the sustainability of the domestic industry.
Impact on Importers: Importers of the specified steel products will face higher costs due to the safeguard duty, potentially leading to increased prices for these goods in the Indian market.
Encouragement for Local Production: By imposing duties on imports, the government is encouraging the use of domestically produced steel, which could boost local manufacturing and employment.
Exemptions for Developing Countries: The exemptions for certain developing countries (excluding China PR, Vietnam, and Nepal for specific products) aim to maintain trade relations while protecting domestic interests.

Conclusion

The imposition of safeguard duties on steel imports is a significant step by the Indian government to address the challenges faced by the domestic steel industry due to a surge in imports. While it provides relief to local producers, it also impacts importers and could lead to higher prices for consumers. Businesses involved in the import or production of steel products should carefully review the notification to understand its implications and ensure compliance.

In case you face any issues related to Indirect Tax-Customs, GST, Foreign Trade Policy (FTP), Arbitration matters and Central Licensing and related advisory matters in India then please feel free to get in touch with SJ EXIM Services.

We offer Legal advice and litigation support in matters related to Indirect Tax-Customs, FTP, other Indirect Tax matters & Arbitration law, all sorts of Central licensing and related matters. Come and explore the new way of doing business with us!

Source: CBIC, Ministry of Finance, Govt. of India

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